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The CEO of Borland Software believes the company is ready to catch its "third-wave".

While observers have widely debated whether Microsoft, nearing the end of its 20s, is entering corporate middle age, CEO Dale Fuller says Borland is nowhere near a mid-life crisis and is instead moving into a new era of innovation. But there are a couple of immediate challenges facing the company, including sales difficulties and the threat from open source.

At 20, Borland is indeed entering its third incarnation. After creating Rapid Application Development (RAD) tools for Windows, then flirting with near extinction as Inprise, application lifecycle management (ALM) earmarks Borland's latest life chapter, a strategy that integrates modeling, design, build, rollout and maintenance of software.

Borland faces at least two immediate challenges, in this, its third era. The first is internal. A year after acquiring TogetherSoft, BoldSoft MDE and Starbase and integrating their products with JBuilder X to create Enterprise Studio 7.0 for Java, the ALM message is taking longer than expected to filter down to the sales people.

"How do you translate that [integration] to some sales guy who is selling a Java tool. That's the translation that's taken a much longer time," said Mr Fuller.

As such, Borland last quarter issued a profit warning followed by a $12.1 million loss, resulting in 125 staff redundancies, including the director of sales for the US Eastern Region.

The company followed this by resurrecting the post of head of sales, a position eliminated after Mr Fuller came to power. Former EDS and Cadence Design Systems executive Matt Thompson was recently appointed Borland's vice president of worldwide sales.

Borland's longer-term threat comes from the encroaching presence of open source, especially the IBM Corp-backed Eclipse tools framework. Open source undercuts vendors like Borland on price.

In the case of Eclipse, the framework, while nominally independent, is geared around creating a tools framework that expands the functionality of IBM's WebSphere Studio Java IDE. IBM is one of Borland's biggest Java IDE competitors.

Eclipse itself has arguably helped accelerate the commoditization of the software tools market, making it difficult for ISVs to compete on cost of development. It's a fact that helped put WebGain Inc out of business last year.